Peamenüü

The Riigikogu is the parliament of Estonia. Its 101 members are elected at general elections for a term of four years. The Riigikogu passes laws and resolutions, exercises parliamentary supervision and ratifies international agreements.

The Riigikogu has 11 standing committees and 3 select committees. Committees of investigation and study committees are formed to investigate issues of public interest or problems of significant imprtance.

Mr. Lipstok explained the optimum amount of the assets of the Bank of Estonia upon the transfer to Euro

09.10.2006 / Sitting reviews

At the beginning of the sitting of the Riigikogu, at a formal ceremony, the President of the Republic Toomas Hendrik Ilves took the oath of office and made a speech before the Riigikogu. President Arnold Rüütel also made a speech.

Then the Riigikogu approved the agenda for the working week and heard the replies to three interpellations.

The President of the Bank of Estonia Andres Lipstok replied to the interpellation (No. 242) concerning the optimum amount of the reserves (assets) of the Bank of Estonia after the transfer to Euro, submitted on 7 June by Member of the Riigikogu Janno Reiljan.

Mr. Lipstok explained that prior to the accession to the Eurozone, the amount of the assets of the Bank of Estonia would be determined by the demand for the Estonian kroon from enterprises and private persons. The amount of kroons in the circulation and the money kept on accounts in the central bank by the banks has an automatic impact on the amount of foreign assets of the Bank of Estonia in the system of the Currency Board. After the adoption of Euro, the balance of the central bank of a Member State of the Eurozone depends on the monetary political decisions of the Eurozone, which impact the assets of the central bank as well as the volume of obligations.

Mr. Lipstok added that after the adoption of Euro the amount of the assets of the Bank of Estonia would be determined by the monetary political decisions belonging to the exclusive competence of the Eurosystem. Speaking of the amount of Euros released into circulation, the President of the Bank of Estonia referred to a rule established in the European Central Bank, the system of central banks – which states that central banks of the Member States were the banks who emitted Euros according to the directions of the European Central Bank and described all their issued Euros with the nominal value and covered with property in the balance of central banks. The transfer from kroon to Euro is not an exception in that sense. “Therefore it is misleading to argue that after the accession to the Eurozone, the Bank of Estonia is only an operator, who has no right to emit Euros,” Mr. Lipstok stated. There is an one-to-one connection between the assets of the Bank of Estonia and the amount of Euros emitted by the Bank of Estonia. Upon the accession of Estonia to the Eurozone, the Bank of Estonia will exchange all its kroon obligations, the cash in circulation included, for the Euro obligations, with a formal quotation between kroon and Euro. The cash of Euros emitted by the Bank of Estonia remains as an obligation on the balance account of the Bank of Estonia. Mr. Lipstok explained: “Since the obligations must be covered with assets in each balance, the cash of Euros registered in the balance of the Bank of Estonia as the obligations are fully covered with the assets of the Bank of Estonia after the accession of Estonia to the Eurozone. Upon Estonia’s accession to the Eurozone, the cash obligation of kroon in the balance of the Bank of Estonia will be replaced by the cash obligation of Euro and the exchange of currency will not have any impact on the assets of the Bank of Estonia.”